Food Industry Glossary

The retail sales equivalent for airlines is defined as the value of all meals, including nonalcoholic beverages, on domestic and international flights originating in the United States. The number of meals is a function of the number of revenue passenger miles flown in the U.S. by domestic and foreign carriers.

The All Other Retailer segment was created in 1990 and represents sales of food and nonalcoholic beverages for immediate consumption at establishments in general merchandise stores (Sears, Kmart), in drug stores (Walgreens), and in other retail hosts (i.e. liquor stores). Sales of food and beverages at convenience stores and supermarket in-store delis are excluded. In addition to major national organizations, small chains and independents are also included. Definitions of these establishments are:

• General Merchandise Stores – "General merchandise group stores [are]…retail stores which sell a number of lines of merchandise, such as dry goods, apparel and accessories, furniture and home furnishing small wares, hardware, and food. The stores included in this group are known as department stores, warehouse clubs, variety stores, general merchandise stores, etc." – U.S. Bureau of the Census
• Drug Stores – "Establishments engaged in the retail sales of prescription drugs and patent medicines…which may carry a number of related lines such as cosmetics, toiletries, tobacco, and novelty merchandise, and which may operate a soda fountain or lunch counter." – U.S. Bureau of the Census
  
  General merchandise stores and drug stores are often combined to form the general merchandise/drug segment
• Other Retail Hosts – This category was formerly included in "Other Public" in previous Technomic, Inc. time series. Included in this segment are: Miscellaneous retailers (liquor, bakeries, etc.)

Note that from 1972-1981 these operators were a part of the "Other Public" segment and from 1982-1989 these were included as part of the "Other Retailers" segment.

The category defined as bars and taverns represents the smallest primarily commercial segment. This segment is specifically defined as "establishments known as bars, taverns, night clubs, or drinking places primarily engaged in preparing and serving alcoholic beverages for immediate consumption. These establishments may also provide limited foodservices." – U.S. Bureau of the Census

Although the primary dollar expenditure in these establishments is for alcoholic beverages, only food and nonalcoholic beverage sales are accounted for in the retail sales equivalent identified by Technomic, Inc.

A foodservice broadline distributor carries a "full-line" of products including dry grocery, frozen, tabletop, equipment and supplies. Many broadliners also carry perishable items such as meat, dairy and produce. The typical broadline distributor carries 8,000-12,000 stock keeping units and provides delivery, credit, sales representation and other value-added services to its foodservice operator customers.

Employee feeding in offices, factories, and plants makes up the business and industry foodservice market. To a large extent this service is handled by contract feeding companies such as:

• ARAMARK
• Service America
• Canteen, etc.

Buying groups are organizations whose main function is to consolidate purchases and provide support for its distributor members. Most small, medium and even some large broadline distributors are members of a buying group. Additionally, most buying groups carry their own members' distributor-label products.

"Establishments that prepare and serve meals for immediate consumption using cafeteria-style serving equipment. Patrons select from food and drink items on display in a continuous cafeteria line." U.S. Bureau of the Census

Companies that operate more than ten foodservice establishments under the same or different names/trademarks and maintain some degree of centralized control. Chain/multi-unit operators manage both commercial and non-commercial establishments.

A sub segment of Full Service. Establishments have table service, full bar service and focus on the lunch and dinner day parts. Check averages are between $10 to $25.

The colleges and universities market represents all full-time and part-time colleges/universities. Included in this group are public and private two-year and four-year colleges and junior college programs. The key foodservice areas are:

• Board contracts in dormitories
• Cafeterias
• Snack shops
• Special function services

Public establishments (freestanding or included in/part of a host establishment) with the objective of preparing/serving and selling meals and snacks for profit to the general public.

Petroleum stores are primarily gas stations with a small convenience store.

Small, higher-margin grocery store that offers an edited selection of staple groceries, nonfoods and other convenience food items.

Convenience stores represent a category created in 1984; it was formerly included in the "Other Public" segment in previous Technomic, Inc. time series. Foodservice in convenience stores includes those items that are sold for immediate consumption and that generally require a piece of equipment for reconstitution or preparation.

Format offering a full line of groceries, meat and produce with at least $2 million in annual sales with 6% to 8% of their sales in GM/HBC. These stores typically carry at least 9,000 items, offer a service deli and frequently a service bakery.

Low-margin, GM/HBC store with approximately 30,000 square feet of selling space and 25,000 SKUs. These stores typically carry fewer sizes but more GM/HBC brands than a supermarket. Food accounts for 20% of store sales.

A sub segment of Full Service. Establishments have a dinner emphasis and check averages over $20. Also known as "White Table Cloth Restaurants."

Retail stores primarily engaged in selling food for home preparation and consumption. Includes grocery stores, meat and fish markets, fruit stores and vegetable markets, candy, nut, and confectionery stores, dairy products stores, retail bakeries, and other miscellaneous food stores. As presented in this document, sales from food stores are defined as grocery and "other food" sales only, and do not include sales classified as foodservice.

Combination of superstore and drug store under a single roof, with common checkouts. These stores also have a pharmacy. Foodservice Industry Includes all establishments, types of businesses and services that prepare and generally serve food, meals, snacks and beverages away-from-home.

Companies that operate and manage foodservice facilities within/for other establishments (typically non-commercial establishments) for the purpose of making a profit.

Establishments with a relatively broad menu along with table, counter and/or booth service and a wait staff. These establishments offer meals and snacks for immediate consumption primarily on-premise, though they may also offer takeout service.

Organizations whose main function is to consolidate purchases and provide support for their distributor members. Most small, medium and even some large broadline distributors are members of a group purchasing organization. Additionally, most GPOs carry their own members' distributor-label products.

The hospitals segment includes all U.S. hospitals, offering both long-term and short-term care, public and private, and general as well as psychiatric and other special institutions. Included in foodservice retail sales equivalent dollars are:

• Patient feeding
• Meals consumed by visitors
• Catering

Very large food and general merchandise store with at least 100,000 square feet of selling space. While these stores typically devote as much as 75% of the selling area to general merchandise, the sales ratio is typically 60/40, e.g., Bigg's and Twin Value.

"Bare-bones," low-priced grocery store that provides very limited services and carries fewer than 1,500 items with limited – if any – perishables.

Establishments whose patrons generally order or select items and pay before eating. Food and drink may be consumed on premises, taken out, or delivered to customers' locations. Note: this segment consists of quick-service, cafeterias, and buffets.

The lodging segment comes under the census heading of hotels, motels, rooming/boarding houses, casino hotels, bed and breakfast inns, RV parks and campgrounds. The specific definition for the group is: "…establishments primarily engaged in providing short-term lodging facilities. These establishments may offer services, such as food and beverage services, conference rooms, convention services, laundry services, and parking." – U.S. Bureau of the Census

For purposes of defining foodservice sales, Technomic, Inc. uses the subcategories of this broader group, which apply to hotels, motor hotels, and motels only. Foodservice sales in other areas such as camps and residential hotels/homes, are included in either the recreational or the "all other" categories.

This term refers to the value of food and beverage products shipped by manufacturers/processors without any margins from distributors.

Table service but limited/no alcohol service. Check averages are in the $6 to $10 range.

Military foodservice includes foods purchased and used by the military on military installations. This would include foodservice for:

• Troop officers' feeding
• Clubs
• Exchanges
• Military hospitals

Scaled-down version of the wholesale club. The mini-club is approximately one-fourth the size of a typical wholesale club and carries about 60% of the SKUs, including all of the major food and sundry departments and a limited line of merchandise office supplies and opportunistic one-time buys.

Non-public establishments where meals and snacks are prepared/served as an adjunct, supportive service to the primary purpose of the establishment.

"Nontraditional locations" is the term used to refer to units of restaurant chains placed at locations that are not separate eating place establishments. This includes units located in a host establishment such as a hospital, college, school, etc. Often nontraditional units take the form of a kiosk, cart or other modified form of the "standard" chain unit.

The nursing homes foodservice market includes feeding to all patients and employees in all institutions, public and private that are categorized as nursing homes. These institutions are primarily engaged in providing in-patient and health-related care and include Elderly Nursing Homes, Convalescent Homes, Homes for the Mentally Retarded and other personal care facilities. Three basic categories exist and they include:

• Skilled care facilities
• Intermediate care facilities
• Nursing and personal care facilities, not elsewhere classified

Homes/facilities for the elderly where healthcare is not primary (such as continuous care retirement centers) are excluded from this segment and included with Other Non-commercial.

Operator purchases refer to the value of distributor sales including distributor margins. Purchases are derived by using food cost ratios which vary by foodservice segment.

The small "corner" grocery store that carries a limited selection of staples and other convenience goods. These stores generate approximately $1 million in business annually.

A significant number of other establishments offer foodservice either for profit or in charitable establishments. This segment is composed of many small groups, some of which include:

• Penal institutions
• Child care centers
• Continuous care retirement centers
• Miscellaneous facilities (convents, seminaries, railroads, homes for the handicapped, orphanages, etc.)

Primary/secondary schools foodservice encompasses all public and private primary and secondary school feeding. Total consumption is based on school purchases and government contributions, which together compose the total dollar value of food. The key components are:

• Lunch participation
• Breakfast participation
• Milk programs
• Commodity contributions
• A la carte feedings

Attractive and comfortable restaurants that serve freshly prepared (or perceived to be freshly prepared), wholesome quality, authentic foods in a reasonably fast service format. A subsegment of LSR, average check is in the $6-9 range.

The recreation segment is broadly defined by Technomic, Inc. to include foodservice food and nonalcoholic beverages sales only in various establishments and locations where activities are considered recreational in nature. The areas of coverage include:

• Amusement parks
• Bowling alleys
• Camps
• Campgrounds
• Convention centers
• Country clubs
• Cruise lines
• Fairs
• Golf courses/tournaments
• Movie theaters
• Municipal parks
• National parks
• Racetracks
• Stadiums/auditoriums/arenas
• State parks and recreational areas

Includes establishments primarily engaged in selling merchandise for personal or household use and rendering services incidental to the sale of goods.

Retail Sales Equivalent relates to the value of sales including foodservice operator margins. For commercial operations, RSE represents retail sales. The term "equivalent" is used to take into account the value of food/beverage items served in non-commercial operations, such as schools and airlines, where food sales are either subsidized or a food sale per se does not take place.

Specialty distributors focus upon a specific product category (e.g., meat, dairy, produce, equipment, beverages, ethnic foods, etc.) or segment (e.g., airlines, vending, etc.). Like broadline distributors they provide delivery, credit, sales representation and other value-added services, but unlike broadliners, specialty distributors do not carry a "full-line" of products. Rather, they typically carry a broader and deeper line within their specialization categories.

High-volume, hybrid format of a superstore and a warehouse store. Super warehouse stores typically offer a full range of service departments, quality perishables, and reduced prices.

Large food/drug combination store and mass merchandiser under a single roof. The supercenters offer a wide variety of food, as well as nonfood merchandise. These stores average more than 150,000 square feet and typically devote as much as 40% of the space to grocery items.

The supermarket foodservice category was added to the Technomic, Inc. time series in 1990. It includes sales of fully prepared foods/beverage products usually for immediate consumption sold through in-store supermarket delis and food bars, and from restaurants located within supermarkets. "Supermarket Deli foodservice encompasses all prepared, ready-to-eat (ready-to-drink) products from the deli department but excludes bulk or unfinished items, e.g., meats, cheeses, assembled but uncooked pizzas. The types of deli products classified as foodservice include: beverages, desserts, fresh salads, fried/BBQ chicken, BBQ ribs, hot prepared entrees, sandwiches, yogurt, tacos, soup and other self-service bars, etc." Additionally, restaurants, food bars and kiosks operating within the store are classified as supermarket foodservice.

Larger than a conventional supermarket with at least 30,000 square feet in total selling area and 14,000+ items.

A foodservice systems distributor exclusively serves chain restaurants and other multi-tenant operators. They carry only items used by their chain customers, typically only 500-1,000 stock keeping units. Systems distributors do not provide sales representation for the products they carry.

The vending market is defined as all food and beverage products sold through automatic vending machines, regardless of their location. Not included are other vended products such as cigarettes, cigars, bulk vending, and other nonfood items.

Low-margin grocery store offering reduced variety, lower service levels, minimal decor, and a streamlined merchandising presentation along with aggressive pricing.

Membership retail/wholesale hybrid with a varied selection and limited variety of products presented in a warehouse-type atmosphere. These 90,000+ square-foot stores have 60% to 70% GM/HBC and a grocery line dedicated to large sizes and bulk sales, e.g., Sam's Club, Costco, and BJ's.